Low-Stress Equity & Options Strategy | Ft. Kirubakaran Rajendran | MastersInOne | EP - 72

[music] [music] [music] Trading strategy is the only thing that you need to know. Everybody will become a profitable trader. No risk-free trading in trading. But there is stress-free trading. Our uh no trading mentality. We always aim for higher risk but that is not the right approach. The professional traders will always aim for lower draw downs. So that has became sensation among the world like okay so anybody can become a profitable trader if they have a positive edge. >> How much capital you started your uh trading journey? >> I started with 5,000 of my scholarship money. Now I'm currently trading with the capital of namaste those vijakar% return basically active incomeally options or passive income investment invest Government bond Add down. active income every year 30% without wasting time. Without wasting time because Traderatically. 30% return generate. Welcome Kiruji. Welcome to the podcast. Thank you so much Vijay. Thank you so much for having me in your podcast. We know virtually for a long time but this is the first time now we are meeting in person and I have always had good about you and know because in our industry we know right I told you when we were coming in cab there are very few genuine people know who share knowledge with respect to our industry and you are one among them who has been continuously sharing whatever things that you've learned and also you are really genuine in what you're doing so you should keep doing what you're doing thank you kay and I saw your tweet one day when you bought your house and you take your parents to that house. Yes. >> So that time I feel I don't know why I feel proud it you know then and that time I commented also for you because I can understand that feeling that what it it gives to your parents. Okay. Right. So on the Twitter and then I understood that you are not normal trader [laughter] you are very systematic trader and you work with rules. Okay. And uh then I saw your podcast with Sake. >> Okay. >> Okay. So that time I decided that I will do podcast with Kiri because see our podcast name is Masters in One. >> Okay. >> Okay. So what I feel that in stock market there are 100 types of ways to make money. >> Okay. >> But you have to master in one and you have to deep dive in that method and then you can make money in that method. It's it's totally okay. You do option selling, you do uh intraday, you do you do scalping or you do swing trading or you do investment anything but you have to master in one. So that is why we started this podcast because my my method is only one method which I follow multi-year time frame breakout but there are many other trader and investor they have their own method. So I tried to you know bring them here and I try to show their method and their mindset to other people also who are trading in stock market. So this was the logic of starting this masters in one podcast. So that is the one thing. Now Not because right exactly I do not know Hindi. So but I'll try to keep it very simple so that anyone who listens to this podcast they can replicate what we are trying to showcase. >> Correct. It's based on rule and logic market. So I will tell you everyone. Okay. So yes, first I want to understand your journey. Okay. Right. Because before that tweet but I want Okay. Sure. Sure. See that it is good that you have brought that topic of whatever the tweet that you have seen me where me buying the house because I started trading in the year 2008 and I always wanted to buy a own flat of me completely through the income from trading. So it took me a long years of journey where just like every single trader will go through ups and downs. >> Okay. >> I bought that flat just last year. So it took me almost 16 years to get to that phase. So that was the first time when know in 1 year I was almost making 1.5 crores of income completely from trading. So I thought okay should do I need to know pull out some portion of that capital and buy something or should I keep compounding it? when you keep compounding it, it is just a number in your account. The moment you take your profits out and do something that gives you the emotional value which no one can replicate. Correct. >> So as you rightly said, the moment when my parents saw the house which I bought >> that is like >> you cannot equent equate it to any kind of income that you make right that is a pure emotional moment. So I am very glad that I've taken that decision of buying the home from my trading income. So the overall journey even though I started in the year 2008, I became a systematic trader only from the year 2014 after I read a book called How I Made $2 million by Nicholas Darvis. >> Oh, so since 2014 you are doing automated system. >> Correct. So 2014 is when I started getting into an trading. So no back then there was no broker providing API. None of them were no giving these kind of automated tools. It was totally no new and very very minimal people were doing algo trading back then. >> So there is one company called Symphony Fintech. Okay. >> So they were the one who were providing algo trading solutions back then. >> And when you have to do algo trading during those period >> the kind of money that you have to spend just to set up an automated system >> itself was so high like I ended up spending 1.5 lakhs just to set it up >> like that time. that time because you need to buy ammy broker they charge you around 30,000 per year and again every month you need to buy data now you are getting data free from broker earlier they'll be charging 2,500 for that and then I do not know coding so I have to rely on a freelancer where I have to give them the rules he will write an ammy broker code so back then amiroker was very famous so amiroker has its own programming language called amiroker formula language AFL so he'll writing the AFL codes and then by the time we automated it I ended up spending almost two lakhs and I remember saving that AFL name as lifech changing indicator dot no kagar whatever name because I have added all the indicators into it I thought that is the holy grail but no eventually did not work but that was a learning phase >> so that is how it started and then eventually I know I started learning more about systematic trading being more about processoriented what you rightly said like masters in one which means that you take one specific path and become master in it and keep following diligently eventually that is going to work for you. So over the years you would have gone through multiple guest everyone would have discussed you multiple setups but just because someone said interesting you did not stop what you were doing and jumped into the other one correct >> what you are doing you are continuing to do till date even now when I came you were showing your setup right because that is your hardcore logic setup which you believe in it so that is what exactly every single trader has to follow you pick the one which is suitable for you and stick to it longer period of time so That is exactly what I also did. >> So uh like since 2008 you are in market and since 2014 you started uh you know trying automated trading systematic way, process way. >> So at the time of start what the difficult things you are getting it like uh you told this thing only that you started depending on the that coder. >> Okay. Then and till when when you started your proper systematic trading what year? >> So it happened almost again some additional four years because in 2014 you're getting into algo trading you are new >> over the period you will make lot of mistakes with respect to systematic trading. So again it took me additional four years in order to know correct all my mistakes and then only I know totally jumped into a proper systematic way because I'll tell you one example uh that was the last slide I kept but I think that is the first thing I should not talk to you about okay >> because it is all about when I started trading or when anyone starts trading >> if trading strategy is the only thing that you need to know everybody will become a profitable trader. >> Correct. You have so many YouTube videos, you have so many books but still why out of 100 people 90 people are still losing money. Why 10 people are still making money? In order to figure that out, it took me so many years. Fortunately, I read one article which is not related to trading. It is related to neuroscience. >> The moment I read that article, everything came into picture. I'll tell you what it is. Yes, >> you are wearing the watch, right? >> Right. >> You remove the watch. >> Okay. >> Okay. And you remove it from your left to wear it in your right. >> Okay. >> Okay. If someone else is watching this video who's wearing it in right, >> just no change it >> and watch it in the other side. Okay. >> Until that point, I always thought what in order to make money in markets is all about strategy, strategy, strategy. M but the moment I start know completely finish that article it is beyond strategy something else is there what you call it that is neuroplasticity so what neuroplasticity is until now when I asked you which side watch you wearing you were wearing in left side now you started wearing it in right side and it is just 20 seconds >> now you started feeling uncomfortable like you are not really comfortable with the right side >> you will not even know know the weight of the watch you don't even remember that you are wearing the Now you could feel this >> because for long many years you are so used to one habit. >> When you are so used to one habit brain forms a neuroplasticity. There is a certain habitual formation. >> So this was my body part like >> exactly. So when someone is doing repeatedly the same thing for a long period of time there will be a neuroplasticity that will be formed in your brain. >> When you try to break that it will give you uncomfortable signal just like how it is giving you now. Right? >> It that is why it is very hard to break a good habit, very hard to break a bad habit because the neuroplasticity is formed in trading. When you see any person who is coming into trading, he will learn one strategy. >> Now he'll apply it for someday after three or four backto-back losses, he will think this has stopped working, he'll move to some other strategy. >> Correct? >> So he's not giving enough room for the strategy to work. So when he jumps from one strategy to the other strategy, the neuroplasticity is not formed in your brain. >> So that is why in trading many people keep jumping from one strategy to the other strategy because they tend to think that strategy is the core logic. No, that is a secret that everyone has it. M but the moment in you know anyways we are going to explain one strategy in this particular video right end of this video whether this strategy or whatever the strategy people follow >> if they pick one strategy like they have to decide this is the strategy I'm picking for next 100 days >> I'm going to follow the rules of the strategy >> it does not matter whether the it is giving you profit or loss on a trade to know trade to trade basis just if it gives buy I buy if it gives sell I have to I have to just focus on the process. So 100 days when you do it automatically the brain will form the neuroplasticity. >> 101st day you take the trade as per the rule. >> But now you try to break your own rule. Try to cut the stop loss. Try to put a target modify your stop loss >> and take a break. Go for a T. >> Before even you complete your tea, your brain will start giving you the same uncomfortable signal. M >> it will tell you you have formed a neuroplasticity now you have broken your habit >> go back and get back to your old habit. So what it will say is you will be completely uncomfortable because you have changed the rules modified the stop loss modified the target. So now your mind is totally shifted from outcome to process. You are not bothered about whether it is going to give you profit or not but you are more bothered because the brain has started giving you uncomfortable signal since you have broken the habit. Okay. So now you will go and follow the rules. You will change the stop loss back to its original point. That is what the segregating the profitable trader from the no losing traders. Once you give enough time for the strategy to form the neuroplasticity no matter what you can't break it. Like you have seen right so many examples. The moment the stock stocks give you 2x or 3x even though you're tempted to close it. The moment you've been doing it for a longer period of time, you will not bothered about that one trade outcome >> over the period. You know this is going to work in your favor. So you will start following it. >> Correct. >> So that is what is the most important part like in the most important know lesson that every single trader has to know take it up. >> So the lesson is that you have to follow the process and at least you have to follow the process for a longer period of time. >> Right? >> So then you will understand that how these things works or not. >> Right? So this uh this thing also I have understood Kiru because uh I am trading since 201 you can say 2013 2014 like I started my career in 2009 but I started trading in 2013 2014. >> So previously also I used to do this thing only sometime I do intraday sometime I do BTS STBT sometime I do swing trading sometime I become investor. So actually you know what I was doing many things I was very busy with all these things but I was not making any profit >> correct >> because I don't know actually what I want to do >> correct >> and I don't know what I have to follow. So then after certain year I understood about multi-year breakout then I started practicing about that thing and then I realized that this one simple thing is giving beautiful return then why should I follow other things. >> Exactly. And then after that day I started practicing only this uh method only but I was not knowing that what I'm doing actually that neuroplasta thing correct >> so >> so Kirubai I know you because you I know that thing that you do mostly option trading option selling >> and I don't know that you do investment also or not but I know this thing systematic way and you are very processdriven and tweet. So that is also like I have tested tested this strategy this is giving this much result. Recently you posted one tweet about mutual fund something you are talking about the schemes right. So which you are following also and rule logic sure and why you are following this strategy and if you have the back test result then also you can show that to us done see I'll I'll start with explaining the core of any strategy that you follow there should be certain core principles behind it. So when you trade with equity >> as long as you know you were saying right as long as the market is in bull run we will make correct >> but if the market is in bare run we can't make returns because all the stocks will obviously go down. >> So what I have know combined in this strategy is two methods one is a turtle trading method and the other one is dual momentum. I have clubbed it together to create the strategy. >> Turtle method is created by Richard Dennis in 1974. Okay. So during that period, Richard Dennis was the first person who popularized systematic trading among the crowd. >> Okay. >> So there was this beautiful incident. What happened was Richard Dennis was so confident that anyone anyone can become a successful trader if they follow a simple rule-based approach. So he tried this experiment by hiring some 14 different traders who do not have any background experience in Wall Streets, any experience in trading. He taught them the basics of trading and gave them a rules to all the 14 people. So when all the 14 people were given the same rules, they just have to follow it strictly. Right? So that is what they did and by following a systematic rules all these 14 traders eventually made close to $175 million back in 1974 itself. So that has became sensation among the world like okay so anybody can become a profitable trader if they have a positive edge. So that was there in my mind and next there was a book I read by uh Gary Antonini the book name is the dual momentum where he combined gold and equity together okay so when you trade it together based on the market movements like when the market is in bullish phase it will invest in nifty if the market is in bearish phase it will invest in gold that was his concept >> so I combined this turtle method along with this momentum dual momentum method to create a strategy where you can implement this in niftybs or gold bees. Two things either you can implement this as a standalone strategy or many option sellers what they do is they buy a liquid case dead funds or know nifty bees or gold bees pledge that and trade when you directly buy nifty bees it can give you 12% on an average but the draw down is very high right it can go down 59 60% like in 2008 60% it went >> even in co also >> it went 33%. So when your asset which you pledged if it goes down then your position sizing will also get affected. Correct? >> So I want to have same kind of nifty returns but I do not want that kind of high draw down. So they can also apply the strategy. [clears throat] >> So the underlying is two things. One is nifty bees and the other one is gold beast. >> So what I'll do is first I'll just know show you the chart. [clears throat] >> See this is the nifty beast chart. Correct. Okay. And this is the gold beast chart. >> Correct? >> What I have done is I've created a ratio like this where you divide nifty bees by gold bees. >> Okay, >> that will plot a chart like this. You are seeing the chart right five it oscillates up and down. >> So if you see this 2008 period >> this ratio is down >> correct >> during 2007 the ratio is up. So whenever this ratio is in uptrend I will buy nifty bees. Whenever this ratio is in downtrend I will buy gold be >> okay because you are dividing by nifty bees. That's >> by gold be. So whenever the ratio is higher I'm going to buy gold I mean nifty. Whenever the ratio is in downtrend I'm going to buy gold. Like in 2025 if you see >> from 2024 till 2026 I would have bought gold not nifty. >> Okay. >> So I would be sitting in a very good profit. So by doing this you will actually trying to buy that market which you will move. >> Exactly. So whichever is in trending I'm not predicting whether it is going to be bullish or bearish. I'm just going to find whichever the instrument is trending. But how do I find is trending >> that is the next question. >> I was coming to that question >> because it is simple chart. Anybody will know what you say uptrend I can say down trend. >> Yeah because if I follow normal Dow theory then also >> correct. So my rules is simple. So what I have done is you create this ratio >> and then you apply the turtle trading system into the ratio. The turtle trading system says >> check what is the last 20 days highest high price like highest price. >> Okay. >> And check what is the last 20 days lowest price. >> Okay. >> If the last 20 days highest price is crossed >> we go long. M >> if the last 20 days 20 days lowest prices crossed on the downside we go short. This is the total trading system rule. >> Okay. >> Instead of applying that rule on either NiftyB or gold be we are directly applying it on the strategy itself. >> Correct. In the ratio in the ratio chart. >> So this is the ratio. So in this ratio when I apply the rules. >> Okay. >> So automatically it is going to giving me the signal like the green one is the highest >> the highest moving average. >> Correct. And the red one is the lowest price. >> This is basically a 20day simple moving average. >> Simple 20 days not moving average down chain channel. >> Dawn chain channel. >> Exactly. So when I apply this down chain channel here I can clearly see when it is breaking out when it is no breaking down. >> So what is the setting which we have to you know do in the dawn chain? >> So it is simple 20 days 20 days nothing else. So when the 20 days we we since the ratio is on close to close basis like [clears throat] >> we use only the last 20 days the close price it's not the high or low it is just the close price. >> Okay. >> So now it is very clear whenever the signal gives me a buy I will go and buy the gold bees I mean sorry nifty be >> nifty bees >> and whenever the signal gives me a sell I will exit the nifty bees and buy gold bees. >> Okay. So simple I have to keep oscillating between nifty and gold >> and this you will follow on a wid time frame on the daily >> daily time frame daily the ratio chart is on a daily >> daily time frame so you just divide the ratio like as I said nifty be by gold be >> track what is the last 20 days no highest high price or 20 days lowest low price >> whenever the signal comes by nifty bees >> whenever sell signal comes exit the nifty bees buy gold be >> that is the core logic behind it >> so once I do do this automatically this is helping me in two things one is nifty and gold is having a negative correlation >> right >> because the both the asset classes are different >> so earlier if I'm trading this only in stocks obviously if the market is going down I'll be in sitting in a negative returns or no return zone for a longer period of time but having this uncorrelated thing when one is giving me a bullish signal the other will give me a negative signal so obviously during the down period the gold is going to help me >> okay >> and second most important part currently is the charges. See with with respect to this kind of setup the number of trades is very very minimal like know we've been trading for a longer period of time >> like the know if we have seen in December 2025 it is asking me to buy a gold like sell signal >> okay >> and now it is asking me to buy nifty be >> nifty >> so almost for seven or 8 months only one trade >> so charges is very minimal >> right >> and also when you calculate the ST for stocks versus ETF If >> your charges on ST is significantly lower I have given this example you consider this >> okay >> we have know buying some stocks I don't even remember what is the stocks cross >> actually lesser than half >> much much much lesser if you see the charges it is 60 rupees here it is just 20 rupees >> so onethird of the charges because with ST >> for gold bees there is no ST >> that is also advantage >> yeah and for nifty bees the ST is 0.001%. >> Whereas with the stocks it is.1%. >> So huge difference where the significantly when you're trading with the higher capital your ST goes down drastically because you're trading with the NiftyB and gold bees. >> Okay. >> So charges itself has gone down drastically. Now coming to the draw down part. So NiftyB you know in 2008 if I'm doing buy and hold NiftBs during the global financial crisis it has gone down 60%. But this rotational strategy has given me only 24.95 almost 25% only draw down >> right that is also >> yeah and all the know the one our as per our uh no trading mentality >> we always aim for higher risk but that is not the right approach the professional traders will always aim for lower draw downs because there is a statistical study done by university of France where consider you have made one lakh today. >> M >> okay tomorrow you have lost one lakh >> you are in a no profit no loss correct you are in zero like you never lost your capital today you made one lakh tomorrow you lost one lakh >> correct >> but when they studied the brain pattern of the same trader when he is making profit versus when he's losing money the pleasure of making money versus the pain of losing money the pain of losing money is two times higher than the pleasure of making money. >> So even though I made one lakh today and lost one lakh tomorrow, I would be extremely sad even though I did not lose from my capital because that is the emotional drain that you will have. >> So once they studied it among a lot of traders, they understood that >> the guy who performing really well on the markets for the longer time are the best risk management people. So they will control the risk to a greater extent. They will always prioritize reducing the risk so that the pain of losing money will be very very less so that over the period you will not feel know very stressful or very very emotional about the market >> and that gives you confidence also because there is [snorts] one loss which I always talk in my video that is emotional loss >> right >> so if you will loss continuously that emotion part so your confidence will come down and if you are getting a very good opportunity also now then also So you will think that no I don't want to trade maybe this will also hit my stop-loss. >> Exactly. Because now they always say right there is no risk-free trading in trading but there is stress-free trading. >> You have to pick how do you define your rules accordingly so that it doesn't give you any stress. >> No that is actually a very good thing almost half draw down we are avoiding. >> Exactly like the pain point is gone down. And if you see in the major crisis like 2008 and 2009 this rotation strategy has significantly outperformed both NiftyBS and gold bees. >> So this is also outperformance. Now you are not you are not going down uh >> on the draw down part but on the returns part also you know really doing well even on the co time also the rotational system has given you good returns. >> So even during this period the gold know rally period nifty did not give you good returns. But combining both with this rotational part you would be betting on the trend. >> Yeah. So recently I was talking to one investor uh I think one week back only he is from also Chennai. So I was like that sir I have not made that much money last financial year. I am feeling not good not feeling good this last financial year for >> so he was like that Vijay why you have not invested in gold and silver. So then also I understood I was I was having that option also I did not invest that is my mistake >> correct >> people are made money there also >> so ultimate aim is to make money >> correct >> it's not like that you buy gold or silver or you make money via stock >> right >> so that time I understood that this one simple thing I did not understand >> because you know as you rightly said see people are buying gold why people are buying gold is it because they understood the economic concept behind it. No, because it is trending, it is moving up. They could literally see Nifty is going down but gold is moving up. Let me know reshuffle the investment here. And also people who are having a larger capital pension funds in all these funds whenever there is a uncertainty in the market specifically when Trump like people know whenever there is negative news that comes out obviously people wanted to move a safer no asset class. So gold acts like that safer assets >> and and there is one one interesting thing is this in this data normally we have not seen the crash like 2008 and 2009 till now in the Indian market >> right >> uh if you see the chart on a monthly time frame of the nifty so you will understand the most painful year was 2008 2011 >> there was no return in that uh four five years correct >> after that we have not seen that type of uh bare market in our history only. So always we had came down by 30 40 15%. And in 2 years again we break the high and we uh did a rally. So this is that important thing is that in that bad year also you are you going down only 16%. >> Correct. Correct. Correct. And also know like in 2008 and 9 you consider the both the years together it has almost made 75% return. >> Yes. So even if you take the overall CAGR >> okay >> if I started one lakh at the you know year of 2008 I would be currently sitting with the portfolio value of 20 lakhs >> oh >> and with the CAG year of 18% >> where we can make 12% or 11% in nifty >> correct and with no 11% or 12% in nifty comes with 60% draw down% draw down here you are making 18% with just 25% draw down and you have a very good profit factor and know you are easily able to beat both nifty bees as well as gold be buy and sell. >> This is this is very good return. I think 18% you are making via this strategy only >> and then you can do option selling also. >> Exactly that is the best part because as an option seller see my returns expectation is this know there is this rule of 72. >> Okay. >> So rule of 72 states that 72 divide by the expected rate of returns >> will tell you how many years it is going to take for you to double your capital. >> Okay. Right. >> If I making only 10%. Huh? >> Then as per rule of 72, it is going to take me 7.2 years just to double my capital. >> Correct. >> My returns expectation is to make 30%. >> And already almost% 18% comes from my >> four year you will make your double already. >> Every every 2.4 years I can double my capital if I make just 30%. >> Okay. >> 18% comes passively through the strategy. Rest 12% I have to make from option selling. You have eight expiries per month. only 12% you have to >> yeah so people are making 7 8% monthly >> you because here my expectation is set 30% I make I double my capital 2.5 years as I said earlier I'm not chasing the returns I am want lower volatility lower draw down so passively the pledged equities the gold bees and niftys if you buy and pledge it 90% margin you're going to get only 10% haircut >> and it is going to give you 18% and rest 12% if I make per here and my returns expectation is met right. >> Okay. So it comes with when know when you manage it with nifty bees or gold bees if you compare the overall CAGR is very minimal if you start the peak of 2018 >> and gold bees also the draw down is significantly higher >> but instead of putting it 50% 50% by you know making it like this rotational strategy that is knowing your expected rate of returns with a lower volatility and it suits your know like most people end of the day everybody wants to make returns >> right >> it Doesn't matter if I sit every day from 9:00 to 3:00 and end of the year I make 30%. versus I still do the same know once 6 months or once or 3 months of kind of a trade returns and if I'm still making hitting that returns part then it doesn't matter right >> correct >> I'll compare that with this uh no I'll show you this chart so this is the year- wise chart >> so this is the rotation strategy year wise returns >> this is which platform >> this is I back tested it using AI >> okay >> so that has given me this report where all I have to do is I just have to download this data like I'll download this data here. >> So you you use AI also in your trading. >> Yeah. I you know >> so nowadays people are saying that AI will take your job. You had you had you are doing job with AI >> because AI it is for a guy like me who doesn't know coding. I always say there are good traders there are good coders >> but there are very few good traders who know also coding. But for a person like me who have the market knowledge but do not have any coding knowledge. If I have an idea, how do I test it? I do not know any coding. So that was a barrier 2 years ago, 3 years ago. Now that barrier is totally removed. >> So how you use AI in your trading? >> So many things say for an example even with respect to this nifty beast thing. So what I did is I just downloaded the data. Okay. Overall the know daily data I've downloaded it >> and and from where we have to download. >> So you can download from the trading view. If you go here, >> okay, >> I just download the chart data and download it. That's all the data gets downloaded. >> So this will give us what? >> So this will give me the historical price data from see here if you see like you can select >> 2018 >> and you can know select 2008 also whatever the period that you mentioned. >> So this is the EOD closing price of the nifty base >> nifty be similarly you can download the same price for gold >> gold base. >> So I download both the data >> okay >> and also I'll download the ratio data like you have the ratio here right? >> Oh yes. So ratio I'll download it here >> and this feature is in it is in trading view. I don't I didn't I did not know also. >> Yes. [laughter] >> So I downloaded three sets of data gold the ratio. Okay. >> Right. >> Now I can go to claude and I can specify like see I've attached the files. >> You go through it and I I'll show you what I have now started with it. Let me go up. So your claude is your assistant. >> Completely completely I don't know multiple things based on that [snorts] because you know when you just give a clear prompts >> it would automatically you know calculate what is the rules that you have specified and accordingly it is going to give you a structured returns. >> Okay. >> So this is what I said. So I have uploaded the data >> and I told see with respect to nifty bees and gold bees. >> So we uploaded only how many files? So I have uploaded the files here like know if you scroll up you will see yeah here yeah here yeah here yeah here yeah here yeah here yeah here yeah here yeah here yeah here yeah gold be and nifts here >> okay >> attached to the gold be and niftbs I did not even give the ratio I just asked it to know create the ratio by yourself >> so it will know divide the values of niftbs by gold bees based on the whatever the excel data we have given okay >> and accordingly it would calculate so that is how you know this has calculated the overall returns like we have seen right 20 lakhs the final portfolio >> and overall What is the overall rotation strategy CAGR? What is the signal? When did it come? Overall equity benchmark, the draw down. >> Oh, >> everything it will create and then it has given you this HTML file. So this is where know that know is developed. So it would automatically analyze like this. So it will check the files and it would check necessary know it would write the Python code on its own. >> Okay. >> And then it would automatically know back test it for yourself. It will not even give you a code. It will run the code itself and then it will generate the output file automatically. >> Okay. >> So that is what it did. It automatically know did all the calculations and everything and accordingly it would generate this HTML file >> which shows that okay out of 19 years 15 years it is profitable. >> Okay. >> Year on year this is the overall strategy returns of the rotation strategy. So every single time you start with one lakh and you ended up with 20 lakhs just by compounding your returns every year. If you track the last four years >> like if you compare it with know nifty >> and if you compare it with know the overall performance >> is good. >> So even if you put 50% nifty B and 50% in gold B and continuously hold it also you will not be able to beat it. >> So it has given you know a significant returns like these black bars are nothing but the strategies returns. >> Okay. And these blue bars are the 50/50 by all. So consistently it is able to beat the overall returns no year on year basis and as long as you run it no the compounding will work in your favor. >> So that is the best part. So with respect to this strategy you don't need any fan no fancy things or anything like all you have to do is find the ratio apply the ratio and check out whenever it gives you buy or sell signal. >> Okay. It is much easier to track the trend based on the ratio rather than applying it on the individual >> and this is logical also. Exactly mathematical quantifiable I'm not asking you to know look for any visual chart patterns it is pure mathematical >> we are not tracking any news actually >> no news no economic factors works on a no pure core fundamental principles >> and you are able to see whichever is trending and obviously whichever is trending that is going to give you the signal here >> after after looking this I think many will stop their SIP [laughter] because normally mutual fund SIP gives you 15 to 18% return 20% return on a CG base >> but if you manage your own capital with this way >> you know you are beating almost mutual fund >> yeah this is for lumpsum it is good like SAP is totally different SAP >> SAP is all different thing but for the mutual suppose one person is investing in mutual fund for the long-term thing uh the lumpsum amount so this is all this is actually you are beating mutual fund >> yeah right and with the lesser draw down also >> right >> and that that is what so it works The moment you give for a longer no duration the compound works in your favor. Say if you for an example if you see from 2008 to 2018 the returns was no almost flat. From 2018 1920 onwards it has grown significantly up because we started compounding reinvesting all the profits. So it started growing significantly. >> So every year like 2020 it has given almost 46%. 21 again 26%. 23 24%. So everything like consider an option seller guy who just bought this based on the know strategies and he pledges it and then trades like know last year I could make 28% from the strategy itself. >> My expected return is 30%. 30%. >> So it is much easier right >> correct >> so on the long run it works beautifully because of the core logic which we have told one is turtle system rules and the other one is Gary and no dual momentum rule you just try to combine it in a different mathematical way so that know that gives you a clear idea on what asset class you should invest in. Okay. So this is very interesting that you invest in nifty and gold base as per the method which you have built uh the ratio chart but then what you trade in option for other 12%. Obviously 12% maybe you are making more than 12%. But what other thing you do in options? Like you have told me off the camera that you do multiple thing using AI with the option selling but if you can share one uh simple logic or one simple strategy that also will be very helpful for everyone. >> Yeah sure. See whatever things we have done is for the passive income which you do not need to spend so much of time in order to follow the strategy which I've shared. >> Right. For the options, what we can do is first instead of direct [clears throat] directly going to a stock mock or algo test and try to create a strategy out of it. >> First let's study the market behavior. Understand how a zerod movement will work. How on expir market moves >> okay >> so this screen is something which I built it for my internal research purpose where I can select any zerod days. Like if I select go back this is a zerod tracker. Okay. ZT means the the expiry chart. Yeah, expiry days. It shows what is the straddle say for an example. >> And what is the meaning of straddles? Because I don't know about options. >> I'll explain. So straddle is nothing but at the time of market opens. >> Say market opened at around 22,500 >> right? >> So 22,500 call and 22,500 put both the strikes premium. you add it together that is the straddle premium >> and I will sell both both the call and put >> correct so at 916 when I check at what price it opened >> it is around 251 rupees correct we have to ignore 915 because we can't get the correct precise price so this is a 916th price so by 960 >> you see add call option and put option together and you are seeing the price is approximately around 250 >> and this red dot is where the price has gone to the highest >> this data We are checking that is basically of 30th March 2026. >> Correct. >> Right. >> Okay. And the straddle opened at 250 and eventually it went to high price of 314. >> Okay. >> And then it started declining. It reached a low price of 98 rupees. >> And again it spiked up somehow but the end point is where it opened and where it closed. >> Right. >> Opened at 215 I mean 250 and closed at around know 200 some. So 50 points of overall profits you get 196. So approximately around 50 points of profits you make >> right. >> So likewise if you keep observing every single straddle chart on so when I clicked on previous it moved to 24th March 2020 the previous weekly expire. >> So there again it opened at 230 >> and then it closed around 69 >> right >> and the high was around just 17% only it moved up >> but eventually decayed >> right? So once you keep studying these market behavior, >> it is clearly evident that most of the time the straddle decays. >> Okay. >> So this is the observation. >> Yeah. So the straddle decays but if I just leave it open without any stop- loss obviously when the market trends I might lose money. >> Right. >> So I have to study out of multiple these kind of scenarios how many times the straddle from the time it has opened moved up. What is the highest point it moved? If it opens at 100, if it moves to 125 rupees, then 25% is the maximum moment it has moved. >> So likewise, if you keep observing every single time, you will have an answer like what is the maximum percentage percentage it went up. >> Yeah. So for here, if you see it is 9%. >> So if you keep scrolling, it has seen 98%. >> This is 98%. >> So I cannot know use a small stop loss. So there will be instances where it moves 55%. There will be instances where it moves only 7%. So there will be calm days, there will be wild days. So what you can create now you can go to algo test or you can go to stock mark and try creating a strategy based on this observation. >> Create a short strle at the market opens at 916. Use a combined premium stop-loss so that when if you're shorting at 100 rupees both call option and put option together. If it moves to 130 no together both C and P together if the premium move to 130 then I will exit both call >> so that I don't want to take one no risk I'll just trade only once a day only on expiry day so this way what happens most of the time when the market did not move beyond 30% the st will decay you will make profits other days when it hits you're losing very little >> so on 100 days 70 days it will work in your favor the rest of the 3 days it might hit the stop loss when you're losing the when the stop loss is hit you're losing a little but other days that is going to make up for the overall profits. So this is one kind of a simple example where you observe the market behavior first like for an example in this case >> it did not even spike like it opened at 472 >> and it closed at 444. So almost 400 points of profit in just one day one day. So likewise once you observe it you will have a different ide >> and what what is the closing time of this str >> you close at 3:20 in the evening. So open at 9:16 close at 320. >> So basically again here you are you are protecting the risk >> and you are allowing the profit >> right? I am not trying to create option buying strategy. I'm not trying to make 50 100% returns because my expectation as I said is clear make 30%. 18% comes passively remaining 12% is my expectations and in that case just one trade so we have eight expiries in a month >> so if even if this works and gives you a 025% returns that itself is going to give you know 2% returns in the end of the month so your target will be hit >> so now when you go and you know build model on based of on top of this then the expected rate of returns can be achieved >> okay and other than this this is just one logic you had shared here. Uh other than this, you invest in stocks also. >> Stocks I do only SIPs but not in stocks. I do only with respect to mutual funds and that do only on the index funds. See I after I read one article I stopped doing SIPs on the stocks. >> Okay. What is that? >> So it is all about say it happened in 19 150 years before. >> Okay. Before even the oil was found 150 years before people what they used to do is they will go for a whale hunting. So that is the major business. >> Why do people go for whale hunting is not for the you know meat of the fish. >> They do this because from the whale they are able to extract a wax and using that wax they can use it in the industries to burn lamps to know light oils. So back then when kerosin oil was not discovered they were using the wax from the whale to run the industries and everyone will go for this no whale hunting. So people who were having the ships who were go for the whale hunting the moment they captured the whale that's their complete yearly profit is done. So they were the millionaires. >> Oh okay. >> Back then people who were go and hunt the whales they became millionaires. People who were funding the know for the whale hunting who were giving the ships they were also making millionaires. So one whole industry was a millionaire industry >> right >> after some 20 or 30 years they discovered oil. The moment they discovered oil people stopped going for veent. It is no more >> and everybody started digging oil and then it's it became an industry standard >> and people who were millionaires went bankrupt overnight because nobody started know using the wax from the wind because it doesn't make sense. the disruption will happen like that. So an industry which is topmost industry take Kodak Kodak camera was one of the best cameras in the world right but they did not know were able to move to the advanced one right even there is one guy from Kodak employee who created the first digital camera but they did not accept that because Kodak was relying on film roles >> they said no if we move to this digital camera our film roll business will eventually lose money so we can't do this but eventually what happened some other company no started giving this digital camera and eventually they went bankrupt. >> Same with Microax, same with Nokia. >> So the industry leader who today might not be the industry leader tomorrow no matter what. >> So when I do an SIP I'm not doing for 5 years or 6 years. I'm doing it for my next generation. I just want to know because in our parents generation they would have invested in land. >> Correct? >> In our generation we have invested in these kind of liquid assets. So I want to pass on the wealth to my kid. So for that I need to be really certain that the investment value will not go down. So studying the industry history has told me that okay where is the market today might go bankrupt. So I might invest but what if in case of the company is not there anymore. What if the industry is not there anymore >> but one thing that I'm really certain is index funds will always be there. Economy the overall index is nothing but it's a trend following system because they keep the good companies kick out the bad companies. >> Correct? So that is the core idea behind index funds. So when I keep doing the SAPS on the index fund be it NiftyB it gold that is I'm very know I'm very confident this will be there for the next 30 years or 40 years even though it is giving me a minimal returns but the returns will be there >> right actually you are not getting minimal return you are you are making good return than other funds also >> so when you make good thing for prolonged period of time that compounds >> so that is why I stopped doing you know stocks SAP and started doing only index SAP >> now one more question this is very personal. If you want to answer, you can answer or you can say no also. >> So, uh uh with how much capital you started your uh trading journey, trading or investment journey? >> See, when I started trading, it was in 2008, I started with 5,000 rupees of my scholarship money, right? And that has happened like before even I went to work and when I started working in Infosys, my salary was 15,000. M >> and eventually you know once I started learning about the markets whatever things that I learned or whatever the work that I did every single money I have know started putting into the markets every single thing I've started putting into my strategies >> and over the period it started compounding both the investing part and the trading part also now I'm currently trading with the capital of around 2.5 cr >> where I pledge like I don't trade with the cash as you said I will pledge that follower can know these kind of rotational strategies >> and then using the margin I trade so I currently I trade only on zero DDT I don't trade on other days >> okay so you don't need cash for M2M also >> M2M I'll keep 10% M2M definitely you need it so whatever the overall capital you have 10% of that will be in always in cash so that no you don't need to liquidate your assets rest of the things it will be in the mutual funds or it will be in the gold bees or niftybs >> so from 5,000 rupees to 2 K five uh 2.5 K so you have never withdraw anything from this amount? >> No. See, I only added more funds into it because see over the period your income will also grow. So when you know when you're making higher income from your job, you add in more funds. So it is not that I turn 5,000 rupees into 2. >> Obviously you have invested also. >> I have invested more and more money which I've know generated from my other incomes and put into the trading. That is how it grown. So when you keep taking out the cash for this and know you don't allow for the capital to grow compounding becomes much harder like for an example last year I took out my profits to buy the flat correct if I have run with the same capital definitely my returns would have been significantly higher >> but there are certain moments where you can't equate it right so those kind of emotional moments has to be there >> and what was your last year profit which you invest in your flat >> so that I took almost 1.5 cr so 1.5 CR as a flat I took took almost some 80 to 90 lakhs from it. Rest I kept it in trading account. No rest I just know put it up in EMI and then went on. >> That's that's very good. And now since how long you are trading full-time trading and investing? >> 2017 is when I quit my job. So 2017 to till date now I'm totally into full-time. >> Okay. But since like 2008 for example you are trading. So 2008 till 2017 almost 10 years >> you traded with your job only. >> Right. Right. >> Right. So norm why I'm asking you this question because normally people what they think if you do trading for one year and then they going then they stop doing job because they think that I have learned many things and fulltime trader but this is not the actually thing I I told many people that don't do don't you know don't don't quit your job because you are started trading before one year >> because you have not seen the proper cycle also. Exactly. >> Okay. If your job is okay, obviously nobody loves their job, but if your job is giving you bread and butter and if it is giving you a comfortable stress-free life for your family, then you should work with your job and you make your strategy like that that you can do with your job also. >> Exactly. >> And nowadays it is very easily possible. >> It is not that that you cannot uh make money with working also. >> Right. >> Right. So and in 2014 there was not so many platform but now there are so many platform you just bring your logic you try to apply here and you just do it and to make more money you need money also. >> Exactly. >> So you have to work for that to become a to make good capital also. >> Right. Right. So that is the thing and >> because know when you do things like when you quit your job and try to become a full-time trader when I did in my case what happened is before I quit the job I was making at that point of time I was making good money from trading itself. Three times of my salary was coming from my trading for 3 months then it gave you huge confidence. The moment I quit the job the next month I was getting 7,000 rupees and the next month I was you know making a loss of minus 50,000. So then only you know the reality has hit you hard because you will have lot many calculations in your mind but the moment you are know so used to a fixed income every month right suddenly when you're know exposed to a fluctuating income trading income you will that will put you in enormous pressure. So someone is trying to quit their job the first and foremost thing that they have to do is do not depend on trading income at least for next 2 years >> keep a buffer income keep some know side income or keep a buffer capital that can take care of all your expenses for 2 years >> because you should not get any pressure to pay the EMI pay buy the groceries know pay the rent all those things will put so much of pressure when so much of pressure is there you will deviate from your rules you will start taking the trades which you're not supposed to Eventually that will put a lot of dent. So the utmost criteria is have an income which you are not depend on trading for 2 years that will give you a smooth sailing no and then eventually you can jump >> and then only you can you know you can wait to you know uh this decay you [laughter] know straight straight otherwise you will square off at 100 point or 50 point very true >> because of the pressure. Okay. So, Ky, I like this uh very much and actually I was expecting some uh not very complicated strategy from your side but I found that you are very simple and very you know processdriven person. So I hope in this podcast gold and nifty or gold ratio chart that is a takeaway for me. Correct. >> Okay. If that that process is making 18 to 16% return that is actually a very big thing. >> Exactly. >> You know because this is only for two different asset class. What if in case you find such a ratio in some other stocks two different stocks if both are uncorrelated to each other apply the same ratio in that and try to back test it what if in case that gives you 20% or 24% so it is just I just opened a path to the users from here people can try multiple other things and they can create their own different set of >> and with this ratio chart we can also understand that now we have to be in the market or not >> except that is also the thing so thank you Kubai thank you very much uh That doesn't matter. podcast and once again thank you sir. >> Thank you. Thank you so much Vijay. As I said earlier whatever things that you're really doing I know I'm I'm I can really feel that energy that you are really an humble person and you wanted to explain or convey many things to your subscriber base. So you always feel the gratitude and I could know literally see that >> and and I feel that responsibility also that I should not take anyone's else on that seat because that seat is very uh you know responsible one thing very true. So that's why my number of podcasts are very less >> because I try to connect with the real person with the real genuine trader or investor. So that's it please like Okay. But this is very good thing right. Yeah. That is what so because we are always so used to one perspective but when you try to mix these two things like turtle system is one system dual momentum is one system but combining it together creating a ratio of it and apply the rules on the ratio is something I find it very fascinating because this uh know this idea comes like know for traders most of the idea will come when you're taking a shower that is your you know thinking room when I was taking a shower suddenly you know I used to think okay this is a nice idea >> but if I have to try this maybe five or 10 years before I have to rely on a coder. Now with the help of AI you can directly download the data from trading view give it to AI instantly you get the result right that is what >> sir one more question I am using generally chat GBT >> okay >> what do you think I should shift to cloud or chat GBT because there is one guy who is also using good AI he told me that Vijay please shift to cloud AI because that is much better so what is your view >> see there are four different AI platforms which is for four different purposes >> complexity No, the perplexity AI is specifically for search purposes. It replaces the Google now. I I never go to Google now and search for something. >> Okay. >> Instead, I use my perplexity app for research >> specifically for searching something. >> Okay. >> Next thing is chat GPT is your uh buddy like whatever things that you have say suppose I'm repeatedly getting a headache what should I do? So it's it's your chat buddy where whatever things you know suddenly have certain things in your mind go and chat it. M >> for all trading related purposes for all research purposes for all analysis purposes start using plot plot is the best whether if you wanted to write a pine script it will write you want to write a python it will write the number of errors that you're going to face will be significantly lower in plot than any other platform Gemini you can just say for example you you wanted to watch a 1 hour podcast but I want the summary of it in short so now I'll use Gemini or I use complexity assistant to summarize the video so that I'll take important learnings from that. >> Okay. >> So you segregate each and every AI tools for specific work that will do wonders for you. >> Okay. So thank you again because I using all the things. Okay. So thank you again. Thank you sir. Thank you. Thank you. [music]